Pater Familias

MONEYBALL AND THE FINANCIAL CRISIS. What does MONEYBALL have to do with the financial crisis? The connection is that Michael Lewis, the author of MONEYBALL (which describes how sabermatricians brought statistical analysis to baseball) has written a long, amusing, and scary article about some of the few people in the financial world who foresaw what would happen (link via TwoBlowhards). They not only foresaw what would happen, they made great efforts to publicize what they foresaw. And they made lots of money selling short. But, as the article explains, the short selling only fed the mania. One scary item: the process that got us here depended on the rating agencies giving certain mortgage-based securities a rating of AAA (the highest rating). To quote from the article: “[One of the short sellers called a rating agency] and asked what would happen to default rates if real estate prices fell. The man at [the rating agency] couldn’t say; its model for home prices had no ability to accept a negative number.” In other words, because their model was based on history, and prices had always gone up, there was no possibility they could go down.

FIVETHIRTYEIGHT (COMMENT). Molly in a comment refers to the FiveThirtyEight website which is bringing in the insights from sabermetrics to political statistics. Nate Silver, who is one of the two authors of the site, is a major figure in Baseball Prospectus. If you like Baseball Prospectus, you will probably like FiveThirtyEight.

THE EXCITING GAME WITHOUT ANY RULES. Baseball nearly had a disaster last night. Mark Harris wrote a baseball novel in which the players passed the time in hotel lobbies playing TEGWAR (”The Exciting Game Without Any Rules”). The joke was on the kibitzers who would gather around and try to figure out the rules; the players would make up new rules continually to frustrate them. Last night what could have been the last game of the World Series was played without some of the players and many of the fans knowing what the rules were for that game. Ordinarily a game that has gone five innings that is rained out with one team leading is official. With ordinary rules, if the rain had stopped the game with the Phillies leading after that time, the Phillies would have won the World Series. Apparently Bud Selig, the Commissioner, had changed the rule an hour before game time to provide that the game would have to go a regulation nine innings. The amazing thing is that he told representatives of each team, but did not make a public announcement. This story shows that a number of the players did not know about the rule change. This story says that “there were real questions being raised in the press box and throughout the ballpark” as it looked likely that the game would be stopped for the night with the Phillies in the lead. The Rays tied the score as the rain fell. Otherwise, the fans and reporters at the game would have found that the rules were not what they thought. Imagine trying to explain to fans that the rules were different—especially to Phillies fans. Why wasn’t there a public announcement of the rule change?

ARE TWINS BETTER IN SOME SPORTS THAN IN OTHERS? The NBA season is starting and the Lopez twins are joining the Collins twins, also identical twins, as NBA players. One of my correspondents suggested to me that twins seem to be more successful in professional basketball than in other sports. He pointed to the Van Arsdale twins in the seventies, the Grants in the nineties, and the Collins twins and Lopez twins today. I checked this wikipedia article and added the names of Heather and Heidi Burge and Coco and Kelly Miller in women’s professional basketball. With the article I came up with Tiki and Ronde Barber and Josh and Daniel Bullocks in professional football. In baseball, nine pairs of twins have played in the majors, even if you go back to 1910—with only five pairs of twins since 1950. So it looks like there is some evidence (although with small samples) that twins do better in basketball. Could one reason be that basketball is a sport that you can practice one on one?

DOES THE TEMPEST DISAVOW LONELINESS? (AUDEN’S VIEW). I was very pleased to see that Hilton Als interprets THE TEMPEST in the light of what he rightly calls “Auden’s astonishing poem based on the play, ‘The Sea and the Mirror’.” Als says that “Ultimately ….Shakespeare was writing about the disavowal of loneliness, a theme that Auden took up….” However, I don’t agree completely with Als. I think loneliness is a major theme of “The Sea and the Mirror”, but I don’t think there is a disavowal of loneliness in either THE TEMPEST or “The Sea and the Mirror.”

SCOTT FITZGERALD, CRITIC. I have been reading Bryant Mangum’s edition of THE BEST EARLY STORIES OF F. SCOTT FITZGERALD. Fitzgerald had remarkable range very early. It’s startling to find such wisdom in a young man who went on to lead such a troubled life. From the beginning, Fitzgerald combined lyricism with analytical distance. The Biographical Note contains a brilliant sentence which summarizes Fitzgerald’s writing as well as his life: “It was as if all his fiction described a big dance to which he had taken, as he once wrote, the prettiest girl…and as if he stood at the same time outside the ballroom, a little Midwestern boy with his nose to the glass, wondering how much the tickets cost and who paid for the music.” The quotation is from Malcolm Cowley, but you will note that Cowley is quoting Scott Fitzgerald.

BENJAMIN BUTTON—THE IMPOSSIBLE PLOT. Scott Fitzgerald’s story, “The Curious Case of Benjamin Button”, has been announced as a Christmas movie with Brad Pitt starring as the man who is born as a 70 year old man and lives his life backwards until he becomes a baby. I have known what the story is about for years, and never wanted to read it. I could never imagine how anybody—even a genius like Fitzgerald–could make a successful story with that plot—too grim, too many inconsistencies, too implausible. We just read the story in our short story group. To my amazement, Fitzgerald pulled it off. The story is charming, and powerful. Now I have to wonder how the movie can ever pull it off. It seems to me that it’s impossible to make a successful movie of the story.

BREW ANOTHER POT OF COFFEE. One of the advantages of watching a baseball game is that you don’t have to pay attention at every moment. There are 162 games in a season, and most fans select what they watch. There is some evidence now that ballplayers and umpires as well don’t always pay close attention. This story tells how a batter for the Angels and the umpire forgot what the ball and strike count was. The batter stayed at the plate after receiving the four balls needed for a base on balls and then struck out. In other words, he struck out on a four-two pitch. Further, Coco Crisp walked earlier in the year after only three balls. What is really remarkable is that in each case there were 24 other players on the disadvantaged team, and coaches, and a manager, and nobody objected. In contract bridge, there is no penalty for a revoke from dummy. Since all of dummy’s cards are face up, all of the players can see a misplay. If there is a revoke from dummy, the appropriate action, it is often said, is to brew another pot of coffee.

“DO YOU WANT TO GO BOWLING?” An indicator of medical progress is this upbeat story about how catcher Koyie Hill has come back to the majors after a home workshop accident in which the thumb and three of the fingers on his throwing hand were cut off. Surgery was able to restore the fingers and thumb. Almost thirty years ago shortstop Roger Metzger had his career effectively ended by the loss of four fingertips in a similar accident. A teammate called him a month after the accident and, in an example of ballplayer humor, asked him if he wanted to go bowling.

IT’S NOT A RECESSION UNTIL THE COMMITTEE SAYS IT IS. I posted a couple days ago on the definition of a recession, expressing a preference for the simple test of two quarters of negative growth in Gross Domestic Product. I should have added that, of course, real GDP should be used (that is, the effect of inflation should be eliminated). I also have to acknowledge that there is an official definition of “recession” and the two-quarter-negative-growth-in-GDP definition is not it. There is a committee of the National Bureau of Economics (the “NBER”) that officially determines whether there has been a recession. This article labels the two-quarter definition as the “folk definition” and describes the process the NBER committee follows. The NBER process gives the committee a great deal of discretion. The NBER definition is “a significant decline in economic activity, spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.” A drawback is the delay involved. A chart in the article shows that for the troughs of the last two cycles (March 1991 and November 2001) the NBER announcement came 22 months and 21 months after the event. I prefer the precise two-quarter definition, but a committee of sportswriters picks the “Most Valuable Player” in each major league every year on even more nebulous criteria, and the result is generally accepted.